First Tennessee and Bank of America joined rivals SunTrust and Regions Bank in rolling back the unpopular debit fees that trace their lineage back to the Durbin Amendment of the Dodd-Frank Act.
"Given the fact that the competitive market has changed, we are canceling the implementation of the debit card fee," said Jack Bradley, executive communications manager for First Horizon, the holding company for First Tennessee.
Keith Sanford, market president for First Tennessee, said the decision wasn't a concession to popular protests that were spurred by the fees, but instead was an acknowledgment that First Tennessee couldn't stand alone when its competitors had eliminated the monthly fee.
"We still have to make up for the the losses from the Durbin Amendment somehow," Sanford said. "Right now, it's just going to be a hole in our budget."
First Tennessee first communicated the rate hikes in September, charging customers up to $3 each month if they used their debit card.
Bank of America's David Darnell, co-chief operating officer, said the Charlotte, N.C.-based bank was reversing its earlier position in response to customer feedback and the changing competitive marketplace.
The bank won't be charging $5 fees to checking accounts to pay for debit card activity, he said.
"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," Darnell said. "As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.
The duel announcements came the day after two other major players in the banking arena backed away from the hated debit card fee - SunTrust and Regions.
Those decisions, in turn, followed similar moves last week by Wells Fargo, Chase and other banks to end new debit fees.
"We have heard from our customers and are responding to their feedback by eliminating the monthly fee for CheckCards," said John Owen, head of consumer services for Regions Bank, which plans to refund CheckCard fees already incurred.
Brad Dinsmore, who heads consumer banking and private wealth management at SunTrust, said the bank "recognized the importance of responding to client preferences."
Although many of Chattanooga's other banks and credit unions never imposed a fee on debit card usage, the biggest banks began adding the fee this fall to recoup revenue lost when regulatory changes capped how much banks could charge merchants to process transactions.
Contact staff writer Ellis Smith at firstname.lastname@example.org or 423-757-6315.